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Zika Fight in Congress Drives Away Potential Manufacturers

Oct. 3 — The delay in Congress to agree on Zika funding caused the HHS to lose potential contracts
to respond to the outbreak, the HHS's medical countermeasures chief said Oct. 3.

“We had manufacturers walk away from negotiations with us because they weren’t sure
the money was going to be there,” Nicole Lurie, assistant secretary for preparedness
and response in the Department of Health and Human Services, said during a press conference.
“We likely missed out on some other promising vaccine candidates.”

Federal health officials outlined how they planned to use the $1.1 billion that the
department received to respond to the outbreak of a virus that has been declared a
public health emergency and has been reported in more than 70 countries, including
59 locally acquired cases in Florida. But the funding, which comes through the
continuing resolution (H.R. 5325) that keeps the government running through early December, arrives more
than seven months late and $800 million short of what the Obama administration requested
in February for
emergency spending. Lurie said she couldn't disclose which companies walked away from negotiations because
it was procurement-sensitive information.

HHS Secretary Sylvia Mathews Burwell said the department already has responded aggressively
to the outbreak, and that the $1.1 billion will support:

developing screening tests,

pursuing additional vaccine candidates,

monitoring the progress of babies who have been infected,

research to learn more about the virus itself and

conducting mosquito surveillance, as they are the main source of spreading the infection.

“We did not wait for the legislation because the threat was too great,” Burwell said
during the press conference. “We’ve made important progress since we began the fight.
And thanks to the $1.1 billion in needed funds that Congress just approved, we can
build on this progress and continue our work.”

‘We're Behind.'

There are nine vaccine candidates, some of which were developed by NIH scientists
and some of which are underway with Biomedical Advanced Research and Development Authority
contracts and vaccine companies. But Lurie said the funding delay means “we are behind
where we should be on vaccine development and diagnostic test development because
manufacturers really couldn’t count on funds being there.”

Burwell said the $800 million gap between what the administration requested and what
Congress approved has caused shortfalls. The Food and Drug Administration didn't receive
any funding for the dozen
emergency use authorizations that agency has approved to screen for the Zika virus. Neither the National Institutes
of Health, the Centers for Disease Control and Prevention nor BARDA received its full
funding request.

“It is important to reflect that there was a reason we asked for the $1.9 [billion].
And those are important uses of money,” Burwell said, adding that much of the money
the department had to borrow to pursue a Zika response won't be paid back through
the appropriation. “The damage that occurred because we took those funds will continue.”

The NIH requested $200 million and received $152 million, which is enough to pursue
a vaccine candidate but isn't enough to pay back any of the money it borrowed from
cancer research and other disease areas (10 LSLR 20, 10/15/16).

CDC Director Tom Frieden said his agency won't be able to replenish funds it took
from Ebola virus work to pay for Zika, and he said there is still important work on
Ebola that needs to be done. “There’s a cost to protecting Americans from the dollars
that were reprogrammed,” he said.

The delay also meant that the HHS had to direct time and energy toward seeking funding
“instead of working to use the funding,” Burwell added.

“That money would be out the door,” Burwell said, “if we had received the money at
the point at which we asked for it.”

To contact the reporter on this story: Jeannie Baumann in Washington at
jbaumann@bna.com

To contact the editor responsible for this story: Randy Kubetin at
rkubetin@bna.com

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